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MARKET CLOSE: NZ shares rise, posts 6.2% quarterly gain

Thursday 31st March 2016

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New Zealand shares rose, pushing the NZX 50 Index to a fresh record and rounding out a 6.2 percent quarterly gain. Orion Health Group, Xero and Fletcher Building gained.

The S&P/NZX gained 38.26 points, or 0.6 percent, to 6,752.42. Within the index, 33 shares rose, 14 fell and three were unchanged. Turnover was $186.7 million.

The index has grown 4.7 percent in the first quarter, reaching fresh record highs after most trading sessions in March. 

"The NZX is just continuing on its remarkable run this month, there's generalised strength across a number of names as we come into the end of this quarter," said Matthew Goodson, managing director at Salt Funds Management. "It's an interesting market these days because relative to history the impact of index funds and exchange-traded funds is far more significant than is has been historically. They can exaggerate volatility, and that's certainly been a factor this month. They're good news for active investors because you can buy stocks at very attractive prices as they move in and out of indices or exchange-traded funds."

Orion Health Group led the index, up 6.8 percent to $3.47. It gained for a second day after the Auckland-based medical software provider said yesterday it had signed a deal with a major healthcare insurer in the United States which will see its Amadeus platform rolled out to its 3 million-strong membership base, It also confirmed it was cutting just under 10% of its workforce in the US and moving to focus on profitability. Shares have declined 43 percent since listing in November 2014 at $5.70 as Orion chased sales growth in lieu of profits.

"It is quite illiquid, but certainly that announcement gives some hope for them to sell their platform to US healthcare insurers," Goodson said. "We're in a market where good news is priced in and then some."

Xero rose 2.5 percent to $15.43 while Freightways gained 1.9 percent to $6.35.

Fletcher Building advanced 1.7 percent to $7.89. The stock has gained nearly 20 percent since announcing its first-half earnings in mid-February, where it posted a 51 percent gain in first-half profit.

Metlifecare grew 1.6 percent to $5.25. It led the index higher yesterday and has added 22 percent to its value since its first half earnings, announced on Feb. 24, where it tripled net profit to $125.7 million.

Sky Network Television rose 1.4 percent to $4.98 while Mighty River Power advanced 1.2 percent to $2.92.

Genesis lost most, down 5.1 percent, or 11 cents, to $2.05. It gave up rights to an 8.2 cent interim dividend today, payable on April 15.

Ryman Healthcare fell 1.2 percent to $8.35, and Tower dropped 1.1 percent to $1.78. 

Non-NZX 50 stock Synlait Milk rose 3.3 percent to $3.15. The South Island dairy processor boosted first-half underlying profit on a 358 percent increase in canned infant formula sales, mainly to specialty milk marketer A2 Milk.

"It's clearly riding the wave of demand from China for infant formula imports through the gray market, and for their key client A2 Milk," Goodson said. "If anything, the results just met expectations, though that movement certainly suggests someone's keen on it."

Compliance listing Oceania Natural climbed 70 percent to $1.09 on their NXT debut. The shares traded up from the 64 cents touted in a compliance listing of 25.7 million shares. The Auckland-based company produces food supplements derived from manuka honey and noni fruit juice and generated revenue of $1.5 million in the year ended March 31, 2015, which it expects will have more than doubled in the 2016 year finishing today.

Energy Mad shares jumped 66.7 percent to 5.5 cents. The company pushed out the timing to achieve positive earnings by a year and said co-founder Chris Mardon left the company's board to focus on growing its Australian business. The stock has tumbled since listing in 2011 after being sold in an initial public offering at $1 apiece.

CBL Corp was unchanged at $2.45 though rose in intraday trading. The company, which sells credit surety and financial risk insurance, has announced a 4.5 cent dividend for the first time since its October listing.


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